NVIDIA Corporation (NVDA)

Financial leverage ratio

		Jan 28, 2024	Oct 29, 2023	Jul 30, 2023	Apr 30, 2023	Jan 29, 2023	Oct 30, 2022	Jul 31, 2022	May 1, 2022	Jan 30, 2022	Oct 31, 2021	Aug 1, 2021	May 2, 2021	Jan 31, 2021	Oct 25, 2020	Jul 26, 2020	Apr 26, 2020	Jan 26, 2020	Oct 27, 2019	Jul 28, 2019	Apr 28, 2019
Total assets	US$ in thousands	65,728,000	54,148,000	49,555,000	44,460,000	41,182,000	40,488,000	43,476,000	45,212,000	44,187,000	40,632,000	38,650,000	30,796,000	28,791,000	26,881,000	25,180,000	23,254,000	17,315,000	15,810,000	14,775,000	14,021,000
Total stockholders’ equity	US$ in thousands	42,978,000	33,265,000	27,501,000	24,520,000	22,101,000	21,349,000	23,851,000	26,320,000	26,612,000	23,798,000	21,147,000	18,774,000	16,893,000	15,334,000	13,914,000	13,099,000	12,204,000	11,214,000	10,336,000	9,704,000
Financial leverage ratio		1.53	1.63	1.80	1.81	1.86	1.90	1.82	1.72	1.66	1.71	1.83	1.64	1.70	1.75	1.81	1.78	1.42	1.41	1.43	1.44

January 28, 2024 calculation

Financial leverage ratio = Total assets ÷ Total stockholders’ equity
= $65,728,000K ÷ $42,978,000K
= 1.53

The financial leverage ratio measures the level of a company's debt relative to its equity. A higher financial leverage ratio indicates that a company is using more debt to finance its operations, which can potentially lead to higher risks but also higher returns if managed effectively.

Analyzing NVIDIA Corp's financial leverage ratio over the past eight quarters, we observe a downward trend from 1.86 in Q4 2023 to 1.53 in Q4 2024. The decreasing trend suggests that the company has been relying less on debt to fund its operations and investments, which can be viewed positively as it may lead to lower financial risk exposure.

NVIDIA's financial leverage ratio fluctuated within a range of 1.53 to 1.90 during this period, indicating some variability in the company's capital structure. It is worth noting that a financial leverage ratio of around 1.5-2.0 is generally considered to be within a reasonable range for most companies, balancing the benefits of debt financing with the associated risks.

Overall, based on the trend of decreasing financial leverage ratio and the fluctuation within a reasonable range, NVIDIA Corp appears to be managing its debt levels effectively and maintaining a balanced capital structure over the analyzed period. However, it is essential for investors and stakeholders to continue monitoring the company's leverage ratio along with other financial metrics to assess its financial health and risk profile.